The Salford-based housebuilder and contractor has submitted plans for 274 homes across two sites connected by the Manchester, Bolton & Bury Canal in Little Lever.
Watson Homes launched a consultation on proposals for 297 homes in September but the scheme has since been scaled back slightly.
The majority of the homes, a mix of one-, two-, three- and four-bedrooms, would be built on two plots close to the River Irwell; the former Creams Paper Mill, and a smaller parcel next to a disused section of the canal off Mytham Road.
Creams Mill opened in 1677 and closed in 2004. It was then demolished in 2011.
A second site, located further to the west off Hall Lane, would also take advantage of a section of the disused canal, providing waterside apartments and houses.
A significant part of the proposed development would see the restoration of a 700-metre stretch of the canal that has been closed since 1936, which would connect the Hall Lane and Creams Mill sites.
The canal restoration work could also include the reopening of Nob End Locks.
Watson bought the sites earlier in 2020 from a private landowner and has approached housing association partners Great Places Housing Group and Bolton at Home to discuss the delivery of affordable housing for the scheme.
The project will provide 89% affordable housing, according to Watson.
P4 Planning is the planning consultant for the project and TDAW Architects is leading on design.
Rob Watson, director at Watson Homes, said: “Our ambitious vision for the regeneration of Creams Mill and Hall Lane has always put the people of Little Lever first. We aim to transform these two sites to create a thriving canal-side community for everyone to enjoy.”
Gillian Worden, associate at P4 Planning, said: “This has been a fascinating and challenging project to finally regenerate the former Creams Mill site which has been vacant since 2004.”